San Francisco's Mayor Ed Lee talks to the Chronicle Editorial Board on Monday, Jan. 9, 2012 in San Francisco, Calif.

San Francisco's Mayor Ed Lee talks to the Chronicle Editorial Board on Monday, Jan. 9, 2012 in San Francisco, Calif.

Photo: Russell Yip, The Chronicle

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Marc Benioff, of Salesforce.com, answers questions at the Web 2.0 Summit at the Palace Hotel on Monday, October 17, 2011 in San Francisco, Calif.

Marc Benioff, of Salesforce.com, answers questions at the Web 2.0 Summit at the Palace Hotel on Monday, October 17, 2011 in San Francisco, Calif.

Photo: Beck Diefenbach, Special To The Chronicle

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Ron Conway, May, 2010.

Ron Conway, May, 2010.

Photo: Catherine Bigelow, Special To The Chronicle

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Zynga Inc. CEO and founder Marc Pincus speaking to employees after a news conference at the new Zynga offices in San Francisco, California, on Tuesday, October 11, 2011.

Zynga Inc. CEO and founder Marc Pincus speaking to employees after a news conference at the new Zynga offices in San Francisco, California, on Tuesday, October 11, 2011.

Photo: Liz Hafalia, The Chronicle

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Marissa Mayer, vice president for search products and user experience at Google Inc., speaks at the TechCrunch Disrupt conference in San Francisco, California, U.S., on Wednesday, Sept. 29, 2010. Mayer said tablet computers are the "wave of the future." Photographer: Noah Berger/Bloomberg *** Local Caption *** Marissa Mayer less

Marissa Mayer, vice president for search products and user experience at Google Inc., speaks at the TechCrunch Disrupt conference in San Francisco, California, U.S., on Wednesday, Sept. 29, 2010. Mayer said ... more

Photo: Noah Berger, Bloomberg

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Tech firms forming group to help shape S.F. policy

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Surging technology companies have become some of the fastest-growing employers and commercial tenants in San Francisco. Now they're poised to become an organized force at City Hall.

Republican Silicon Valley "angel investor" Ron Conway will announce today that he and roughly 80 high-tech firms - including microblogging service Twitter, cloud-computing company Salesforce.com and social-game designer Zynga - have formed an interest group to engage city officials on public policies that affect them.

It starts with job training and lending tech expertise to government problems, but city officials expect the focus to expand to issues like overhauling the city's payroll tax and improving Muni funding.

Organizers of the group, called San Francisco Citizens Initiative for Technology & Innovation, or sf.citi, say their goal so far is not to influence elections but to fix problems.

"It's about uniting the voice of tech companies," said Conway, chairman of the new nonprofit corporation. "We have a vested interest in helping make San Francisco the 'Innovation Capital of the World.' "

The effort comes as Mayor Ed Lee this week said the city needs to "innovate our way to solutions." He also wants members of the burgeoning tech elite to boost their philanthropy, and said he intends to turn even more to private money and efforts to plug holes in city services left unfunded by budget woes at the local, state and federal level.

"They can help fulfill those needs by way of talent and innovation," Lee said. "I never said philanthropy was simply 'Write me a check.' "

Nationwide trend

Cities from San Jose to New York are increasingly turning to private sources to help fund things like Christmas festivals and public school programs as tax revenue lags while the nation's economy struggles to recover.

In New York City, the issue has become controversial because billionaire Mayor Michael Bloomberg has decided several times to fund city programs personally. Last summer, for example, he contributed $30 million from his own foundation to a program intended to close the achievement gap between black and Latino youths and their white counterparts.

While some praise his generosity, others say it gives him too much power if he's in charge of both the city and funding its programs.

Lee has made embracing tech companies a centerpiece of his administration and his campaign pledge to create jobs. Many of the executives of the new group donated generously to support Lee's candidacy.

Some observers say the tech industry is finally starting to gain political clout commensurate with its economic influence, which is no different from labor unions or other business interests, and that its ascendancy can only help pull city government into the 21st century while increasing civic engagement among thousands of tech workers who live here.

Others, though, said the public should be cautious when the city accepts private donations and services.

"Obviously the city needs money, but there's a balance they need to find. Are you saving money at the expense of voter accountability?" said Phillip Ung, policy advocate for California Common Cause.

Supervisor John Avalos, who finished second to Lee in November, welcomed the philanthropy but warned of undo influence.

"That influence that they may have concerns me." Avalos said. "Are there strings attached?"

Lee in February created a tax break for the city's Mid-Market area designed to keep Twitter from leaving the city, one of his first major policy moves. He signed separate legislation in June meant to keep Zynga, Yelp and other startups in San Francisco by exempting stock options from taxes.

Donations for Lee

Tech executives and investors contributed the bulk of more than $638,000 donated to an independent expenditure committee Conway set up to support Lee's election bid in November, campaign finance records show.

Salesforce.com billionaire CEO Marc Benioff, for example, donated $75,000 to an independent election committee supporting Lee. Benioff also recently donated $1.5 million with his wife, Lynne, to the city to quickly help the nearly 2,200 schoolchildren sleeping on couches, in cars and in crowded shelters after reading in The Chronicle about the problem of homeless families.

Some members of the Board of Supervisors so far don't seem overly concerned by Lee's increasing reliance upon private help, especially as they begin to grapple with a $263 million deficit for the 2012-13 fiscal year that could grow.

Supervisor Carmen Chu, chair of the budget committee, said philanthropy has always been "part of San Francisco's fabric."

"We have to take a look at all the private funding that's available," she said. "We have to be flexible and turn to different sources of revenue."

Board President David Chiu said he was especially pleased that new technology companies and their CEOs are becoming more politically active and being encouraged to boost their civic giving.

"We need to ensure that we do a better job as a city of balancing our budget, but I don't think it's inappropriate to ask the business and technology companies to help," he said.

Creating jobs

Representatives for sf.citi said their short-term plans do not include forming a political action committee to direct money to candidates or ballot measures, but a draft of frequently asked questions prepared by the group describes it as an organization "created to leverage the collective power of the technology sector into a force for civic and political action."

The first steps will be establishing an apprenticeship program to train people in tech skills and get them jobs, while also teaming with Code for America, a nonprofit of self-described "Web geeks, city experts and technology industry leaders" dedicated to using technology to improve government. Tech companies need skilled workers, and plenty of San Franciscans need good jobs, Lee said.

"People looked at the Twitter deal and said, 'I hope this means jobs for everybody,' " Lee recalled. "Well, this is how we do it."